Disgraced activist investor Brian Myerson, who was severely penalised this summer for involvement in a secret shareholder concert party, has sold a blocking stake in struggling biofuels group D1 Oils, paving the way for a takeover.

Principle Capital, a Myerson-controlled investment fund, has been sitting on a 27.5% stake in D1 for months, blocking efforts by the board to secure a future for the business.

Filings released after the stock exchanged closed tonightshowed Principle had sold its entire interest to a vehicle called Harrier Capital earlier in the day. It is believed this new shareholder may be connected to a potential bidder for D1.

The company, which specialises in making biofuel from the tropical oilseed-bearing Jatropha tree, had been in takeover discussions with at least two interested parties in the spring. One suitor — Mission NewEnergy — made an indicative share-based offer for the business, but it came to nothing when it became clear Myerson would block the deal.

Myerson accused D1 management, then led by chief executive Ben Good, of presiding over "a catastrophic destruction of value". He has campaigned for D1 to be broken up and its cash returned to shareholders. In July, however, at an extraordinary shareholder meeting requisitioned by Myerson he called for the entire board to be sacked and replaced with his representatives but was roundly defeated. That left the future of the business in deadlock and cash reserves rapidly draining away.

Yesterday's share sale by Myerson raises the prospect of a takeover deal re-emerging. It is not known how much Myerson received for relinquishing his interest in D1. However, one non-financial reward he appears to have secured was the removal of chief executive Good, who left D1 with immediate effect at the end of August.

In July Myerson was publicly castigated by the Takeover Panel for his role in a unconnected power struggle last year at Principle Capital. He received a so-called "cold shoulder" order — the City equivalent of an Asbo — which is supposed to bar Myerson from takeover situations. Myerson and associates were said to have acted in concert, breaching the panel's takeover code, and to have later given explanations that were "co-ordinated, disingenuous and dishonest".